Question 1

According to economists,one of the four broad categories of resources is money.

Accepted Answer

A) True 
 B)False

Question 2

Economists believe that people's wants are

Accepted Answer

A)   finite.
B)   infinite.
C)   irrational.
D)   unimportant because needs are more important than wants.E) C) and D)
F) B) and D)

Question 3

List and describe the four broad categories of resources.Cite an example of each to help support your answer.

Accepted Answer

Economists divide resources into four ca...

Question 4

The need to make choices is most closely related to the economic concept of

Accepted Answer

A)   opportunity cost.
B)   efficiency.
C)   inefficiency.
D)   utility.
E)   disutility.F) A) and B)
G) A) and C)

Question 5

Which of the following statements is false?

Accepted Answer

A)   To an economist,the resource land includes natural resources such as minerals,forests,water and unimproved land.
B)   To an economist,the resource capital consists of unproduced goods that can be turned into produced goods.
C)   To an economist,the resource labor consists of the physical and mental talents people contribute to the production process.
D)   To an economist,the resource entrepreneurship refers to a particular talent that some people have for organizing the resources of land,labor,and capital to produce goods,seek new business opportunities,and develop new ways of doing things.E) B) and C)
F) A) and B)

Question 6

Price is the only rationing device that can be used in a modern economy.

Accepted Answer

A) True 
 B)False

Question 7

The condition in an economy that makes a "rationing device" a necessity is:

Accepted Answer

A)   the economy is organized around free markets.
B)   the economy is centrally planned by the government.
C)   scarcity exists.
D)   there are fewer types of goods than there are people in the economy.E) A) and B)
F) B) and C)

Question 8

The condition often used in economics to isolate the relationship between two variables is

Accepted Answer

A)   causation.
B)   abstraction.
C)   ceteris paribus.
D)   efficiency.E) C) and D)
F) B) and C)

Question 9

Several years ago,a bookstore chain extended its closing time from 9 p.m.to 10 p.m.Now it is considering a further extension to 11 p.m.In making this marginal decision,the results of having gone from 9 p.m.to 10 p.m.are

Accepted Answer

A)   no longer relevant to the current decision.
B)   relevant if the marginal costs and benefits were unequal.
C)   relevant since they are part of the calculation of total costs and benefits.
D)   relevant if the marginal costs and benefits were equal.E) A) and D)
F) A) and B)

Question 10

Opportunity cost is the value of __________________ when a choice is made.

Accepted Answer

A)   the most highly valued forfeited alternative
B)   the alternative chosen
C)   a free good
D)   the sum of all forfeited alternativesE) A) and C)
F) A) and D)

Question 11

The slope of a straight line is always equal to either 1.0 or -1.0.

Accepted Answer

A) True 
 B)False

Question 12

All sellers may be tempted to raise the price of what they sell,but a negative unintended effect for the seller of raising the price could be __________ in units sold that is large enough to __________ the seller's total revenue earned.

Accepted Answer

A)   an increase; raise
B)   an increase; lower
C)   a decrease; raise
D)   a decrease; lowerE) A) and B)
F) A) and C)

Question 13

To an economist,the terms factor and output are synonyms.

Accepted Answer

A) True 
 B)False

Question 14

Economists use the ceteris paribus assumption primarily in order to

Accepted Answer

A)   make their analyses easier for them to conduct.
B)   designate what they believe is the correct relationship between two variables.
C)   explain why people sometimes consume more of a good when its price rises.
D)   explain why those things that come first do not necessarily cause those things that come later.
E)   designate the difference between normative and positive economics.F) B) and E)
G) C) and D)

Question 15

Microeconomics is the branch of economics that deals with

Accepted Answer

A)   highly aggregated markets or the entire economy.
B)   the production side of the economy,exclusively.
C)   the buying side of the economy,exclusively.
D)   human behavior and choices as they relate to relatively small units --- an individual,a firm,an industry.E) A) and D)
F) B) and C)

Question 16

The higher the opportunity cost of doing something,the more likely it will be done.

Accepted Answer

A) True 
 B)False

Question 17

The coordinates of point A are 400 units of X and 40 units of Y.The coordinates of point B are 480 units of X and 60 units of Y.With X on the horizontal axis and Y on the vertical axis,the slope of the line between points A and B is

Accepted Answer

A)   + 0.25
B)   + 4.00
C)   + 0.33
D)   - 4.00
E)   - 0.25F) B) and C)
G) A) and E)

Question 18

Which of the following is a positive economic statement?

Accepted Answer

A)   The temperature is too high today.
B)   The temperature is 105 degrees today.
C)   It is too hot to jog today.
D)   I enjoy summer evenings when it cools off.E) C) and D)
F) A) and B)

Question 19

Something that motivates or encourages people to take an action is referred to as a(n)

Accepted Answer

A)   utility.
B)   abstract.
C)   market.
D)   incentive.E) All of the above
F) A) and B)

Question 20

By looking at the different slices of a pie chart,and comparing one slice to another,it is possible to quickly estimate

Accepted Answer

A)   relative relationships.
B)   absolute relationships.
C)   the slope of a line.
D)   the slope of a curve.
E)   none of the aboveF) A) and B)
G) A) and C)

Exam 1: What Economics Is About

By looking at the different slices of a pie chart,and comparing one slice to another,it is possible to quickly estimate

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Price is the only rationing device that can be used in a modern economy.

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The slope of a straight line is always equal to either 1.0 or -1.0.

Correct AnswerverifiedShow Answer

The condition often used in economics to isolate the relationship between two variables is

Correct AnswerverifiedShow Answer

Economists use the ceteris paribus assumption primarily in order to

Correct AnswerverifiedShow Answer

Several years ago,a bookstore chain extended its closing time from 9 p.m.to 10 p.m.Now it is considering a further extension to 11 p.m.In making this marginal decision,the results of having gone from 9 p.m.to 10 p.m.are

Correct AnswerverifiedShow Answer

All sellers may be tempted to raise the price of what they sell,but a negative unintended effect for the seller of raising the price could be __________ in units sold that is large enough to __________ the seller's total revenue earned.

Correct AnswerverifiedShow Answer

The condition in an economy that makes a "rationing device" a necessity is:

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Which of the following is a positive economic statement?

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To an economist,the terms factor and output are synonyms.

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The coordinates of point A are 400 units of X and 40 units of Y.The coordinates of point B are 480 units of X and 60 units of Y.With X on the horizontal axis and Y on the vertical axis,the slope of the line between points A and B is

Correct AnswerverifiedShow Answer

The higher the opportunity cost of doing something,the more likely it will be done.

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Something that motivates or encourages people to take an action is referred to as a(n)

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Which of the following statements is false?

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The need to make choices is most closely related to the economic concept of

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Opportunity cost is the value of __________________ when a choice is made.

Correct AnswerverifiedShow Answer

Economists believe that people's wants are

Correct AnswerverifiedShow Answer

Microeconomics is the branch of economics that deals with

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List and describe the four broad categories of resources.Cite an example of each to help support your answer.

Correct AnswerverifiedEconomists divide resources into four ca...View AnswerShow Answer

According to economists,one of the four broad categories of resources is money.

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All sellers may be tempted to raise the price of what they sell,but a negative unintended effect for the seller of raising the price could be in units sold that is large enough to the seller's total revenue earned.

Correct Answer
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Economists divide resources into four ca...
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